Neil MacGillivray: Business owners beware of potential CGT changes

OTS report

clock • 4 min read

The recommendations that the Office of Tax Simplification (OTS) put forward in its review of capital gains tax (CGT), published on 11 November, has created quite a stir. Neil MacGillivray warns that, if the key proposals are adopted, current CGT planning opportunities may be lost, particularly for owner managed businesses

The OTS report highlights how the CGT rules can distort behaviour and do not meet policy intent, in particular, their interaction with income tax and inheritance tax (IHT). For example, the lower rates of CGT can act as a motivator for owner managed companies to retain accrued income within their company in the hope they can benefit from lower CGT rates on selling or winding up the business. What grabbed the headlines was the key recommendation that CGT rates should be aligned with income tax rates. The closer alignment of rates would reduce the complex rules needed to police the boundar...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Tax planning

Assessing the impact of the Budget on AIM shares

Assessing the impact of the Budget on AIM shares

How the Budget has changed tax-efficient investment

Stephen Kenny
clock 20 November 2024 • 4 min read
Farmers urged to mitigate against IHT changes as protests hit Westminster

Farmers urged to mitigate against IHT changes as protests hit Westminster

Budget scrapped valuable IHT reliefs for agriculture and business assets

Jenna Brown
clock 19 November 2024 • 5 min read
Don't panic! Call for calm after Budget pensions IHT change

Don't panic! Call for calm after Budget pensions IHT change

Lisa Webster calls for a calm response to the IHT changes announced in the Budget earlier this month...

Lisa Webster
clock 14 November 2024 • 3 min read